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AB-1121 Sales and use taxes: exemption: emergency preparation items.(2021-2022)



Current Version: 01/03/22 - Amended Assembly

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AB1121:v98#DOCUMENT

Amended  IN  Assembly  January 03, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1121

Introduced by Assembly Member Rodriguez

February 18, 2021

An act to add and repeal Section 6379.4 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1121, as amended, Rodriguez. Sales and use taxes: exemption: emergency preparation items.
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from the taxes imposed by those laws. Existing law requires a bill that would authorize a new tax expenditure under the Sales and Use Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.
This bill, on and after January 1, 2022, until January 1, 2024, would exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of, emergency preparation items, as defined, sold or purchased during the 3-day period beginning at 12:01 a.m. on the Saturday before the last Monday in June and ending at midnight on the last Monday in June. The bill would include additional information required for any bill authorizing a new tax expenditure. The bill would also make related findings and declarations.

Existing law requires a bill that would authorize a new tax expenditure under the Sales and Use Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.

This bill would state the intent of the Legislature to enact legislation to comply with those new tax expenditure requirements.

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.
Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares the following:
(a) The California State Auditor in an audit determined that counties were not adequately following key practices for emergency planning, including having emergency plans for alerting, evacuating, and sheltering residents and assessing the needs of their communities in advance of disaster events. Counties have been improving their emergency response capability, but many are still less prepared for future natural disasters than they should be. As a result, residents for whom counties are responsible are at a greater risk of harm.
(b) Deficiencies include, but are not limited to, not having evacuation plans and not issuing effective alert and warning messages. As natural disasters grow in severity and frequency, the potential effects of being underprepared also grow. Therefore, it is critical that the state also do more to ensure that local jurisdictions and their residents are as prepared as possible.
(c) The Legislature declares that providing a three-day exemption from paying sales and use taxes for the next two years will create awareness and a public discussion of what Californians need to do to be prepared. This exemption, when accompanied by a public awareness campaign, will save lives and ensure the safety of Californians.
(d) It is the intent of the Legislature to encourage its residents to sign up for all alerts, to know how and when to evacuate, and to know how to be personally prepared and responsible to take action during an emergency or disasters. Residents should have an emergency kit, a “Go Bag,” and supplies necessary to provide for their means during emergencies and disasters.
(e) When natural disasters occur and threaten people’s safety, timely alert and warning messages can mean the difference between life and death. Emergency communications that are directed to the public to attract their attention, such as evacuation warnings, persuade them to take action to protect themselves. Alert and warning messages are most effective when emergency management agencies issue them quickly and ensure that they are understandable. Any delay in people’s receipt or understanding of alert and warning messages directing them to evacuate or otherwise protect themselves can threaten their safety or even their lives.
(f) Counties and cities use several different methods of sending emergency alerts to their residents. Some systems, like the Integrated Public Alert & Warning System Wireless Emergency Alerts (IPAWS WEA) and Reverse 911, do not require individuals to sign up to receive them. Other systems require that people register in order to receive emergency alerts. It is vital that our emergency alert and warning systems include numerous and redundant technologies and services.
(g) To measure the effectiveness of the two-year, three-day exemption on the payment of sales and use taxes on the sale of emergency supplies, it is the intent of the Legislature that there be a determination of the number of individuals who register for local emergency alerts over the period of the exemption.

SECTION 1.SEC. 2.

 Section 6379.4 is added to the Revenue and Taxation Code, to read:

6379.4.
 (a) On and after January 1, 2022, there are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, emergency preparation items sold or purchased during the three-day period beginning at 12:01 a.m. on the Saturday before the last Monday in June and ending at midnight on the last Monday in June.
(b) For the purposes of this section, “emergency preparation items” shall mean all of the following:
(1) A portable generator used to provide light or communications or to preserve perishable food in the event of a power outage, if the gross receipts or sales price from the sale or purchase of the portable generator is less than one thousand five hundred dollars ($1,500).
(2) The following items if the gross receipts or sales price from the sale or purchase of the item is less than seventy-five dollars ($75):
(A) A reusable or artificial ice product.
(B) A portable, self-powered light source.
(C) A gasoline or diesel fuel container.
(D) A AAA cell, AA cell, C cell, D cell, 6 volt, or 9 volt battery, or a package containing more than one battery, other than an automobile or boat battery.
(E) A nonelectric cooler or ice chest for food storage.
(F) A tarpaulin or other flexible waterproof sheeting.
(G) A ground anchor system or tiedown kit.
(H) A mobile telephone battery or battery charger.
(I) A portable self-powered radio, including a two-way radio or weather-band radio.
(J) A fire extinguisher, smoke detector, or carbon monoxide detector.
(K) A self-contained first aid kit.
(c) (1) For purposes of complying with Section 41, the Legislature finds and declares that the goals, purposes, and objectives of providing a three-day period in June for two consecutive years beginning in 2022, where no sales or use taxes will be collected on the sales of specified emergency supplies, is to assist and encourage Californians to be prepared in time of emergency or disaster.
(2) (A) To measure whether the two-year, three-day exemption on the payment of emergency supplies achieves its intended purpose, the California Department of Tax and Fee Administration shall annually prepare a written report on the following:
(i) The dollar amount of taxes not collected in each city and county for the purchase of specified emergency supplies.
(ii) The cost to the state of administering the two-year period of no sales tax on emergency supplies.
(iii) The use of emergency alerts. In order to assess this, the Office of the California State Auditor shall collect the following data on June 1 of each year for the 2022, 2023, and 2024 calendar years and provide it to the California Department of Tax and Fee Administration in a written report:
(I) The number of individuals who have registered with their county or city to receive emergency alerts.
(II) The number of individuals in the county or city who are eligible to sign up to receive emergency alerts.
(III) The number of times the county or city has sent an emergency alert.
(IV) The number of emergency alerts successfully received by individuals in the county or city during each time an emergency alert was sent.
(B) The California Department of Tax and Fee Administration shall submit the report in compliance with Section 9795 of the Government Code, and shall provide the report to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, the Assembly Committee on Revenue and Taxation.

(c)

(d) This section shall become inoperative on January 1, 2024, and as of that date is repealed.

SEC. 2.

It is the intent of the Legislature to enact legislation to comply with the requirements of Section 41 of the Revenue and Taxation Code.

SEC. 3.

 Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act.

SEC. 4.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.